Did you know that the profit margins for liquor stores can be between 20 and 40 percent higher than food-only establishments? In recent years, a record number of growing liquor stores, beer stores, and other beverage outlets have applied for liquor licenses.
Of course, filing for a liquor license is easier said than done. Unfortunately, most cities and municipalities limit the number of distributed liquor licenses. Additionally, for the uninitiated, the liquor license application process can be tiring and burdensome. Moreover, depending on which state you live in, the cost of obtaining a liquor license can amount to hundreds (or thousands) of dollars!
If you’re daunted by the application process, you’re not alone. To help streamline the liquor license application process, we’ve outlined five mission-critical steps that you must follow to quickly and efficiently obtain your permit.
How to Get a Liquor License: A Simple Step-by-Step Guide
When it comes to small business success, planning is key. If you’re pursuing a liquor license in the United States, you probably have a few questions. How complicated is the liquor license application process? How long does it take to obtain one, and how much can they cost?
While specific liquor laws vary by state, and even from town to town, the general areas you can expect these laws cover include:
- Who can be served liquor
- What kind of containers alcohol can be served in
- When liquor can be served
- Where liquor can be served
- How much liquor can be served at one time
- How much liquor can cost
Step 1: Contact Your State’s Governing Agency
The first step is to refer to Alcohol Beverage Control Boards (ABC boards) statewide directory for links to each liquor authority, along with their official contact information. Consider which type of liquor licenses or permits you will need.
- Restaurant (R) license
- Club (C) and Catering Club (CC) licenses
- Hotel (H) license
- Distributor (D) license
- Limited Winery (LK) License
- Limited Distillery (AL) License
- Brewery (G) License
- Eating Place (EP) permit
- Sunday Sales (SS) permit
Contact your state’s governing agency to determine what kind of liquor license you need for your business, as well as the availability of that license.
Step 2: Prepare and Submit Your Application
Prepare and submit your application along with any forms, documents, or other information required by your state or municipality. You will also have to pay an application or processing fee, which may amount to several hundred dollars. Check for additional forms or permits required by your state or local government.
Step 3: Hurry Up and Wait
The liquor license application process can take up to a year, so be sure to apply as early as possible in your business opening. Depending on where you live, many towns have a liquor license quota, so you may not be able to get a new license at all if the quota has been filled.
Once your liquor license application is approved, expect to pay as little as $100 or as much as $15,000 (or more) in fees, depending on your location and type of business. According to a 2018 state-by-state cost breakdown report by Ballotpedia, the average cost for liquor licensing was around $1,400.
Step 4: Train Your Staff and Display Your License
Once you have acquired the proper license and permits, you must constantly display your liquor license and other documentation in a conspicuous place under a transparent cover for patrons and government officials to inspect quickly. Follow your state’s liquor license display guidelines for this important step.
Ensure your staff is adequately trained and knowledgeable of the liquor laws governing sales and service in your state and area. Be aware that your license can be revoked if you violate the terms set by your local agency.
Step 5: Pay Renewal Fees On Time to Avoid Penalties
For your liquor business to remain in good standing with the government, you will pay a yearly renewal fee, which can cost anywhere up to the cost of the permit itself. Don’t let your licensing slip; otherwise, you will also have to pay penalty fees if you are late to renew and could be subject to other surcharges. Sometimes local agencies provide reduced renewal fees for remaining in good standing with them throughout the year. Some states have even waived retail business licensing fees for those most impacted by the COVID-19 pandemic.
Utilize POS Nation’s POS System for Your Liquor Store
Although there is always cost and careful consideration involved, obtaining a liquor license can bring higher profits to your business if done correctly. Hopefully, our step-by-step guide for the liquor license application process provided a valuable one-stop resource to streamline this part of your business plan.
Armed with your new in-depth understanding of the liquor license application process, your next step is choosing a point of sale (POS) software system perfectly designed for your liquor business. POS Nation works with a variety of liquor stores, making us an ideal solution for new owners looking to get their business off the ground, as well as seasoned owners who are branching out.
As a recommended next step, watch our free webinar: Increasing Your Liquor Store Profits in 2021. We’ll give you all the insider intelligence needed to succeed as a new business this year (and beyond)!